read, that Mr. Mansure and I thought we had full agreement and understanding in regard to the combination but Mr. Dulles thought differently and he requested me to cancel the contract and I wrote letters to both De Young & Moscowitz and Harrison & Abramovitz canceling the selection which had only been carried through the talking stage, no contract had been negotiated. The situation is the same this day.

Mr. KEATING. The thing is right back where it started and there is nobody selected.

Mr. STROBEL. That is right. An argument has developed between Public Buildings and CIA as to who should be the contracting officers. Mr. Dulles takes the attitude that according to let us say authority given to him through the appropriation, he must be the contracting officer, and he wants to use us in Public Buildings only as technicians. I have said that unless we are contracting officers, we will have nothing to do with it. We are the construction agency of the Federal Government and we see no reason why an agency like CIA that is not qualified to carry out a construction job of this caliber should be the contracting officer.

Mr. KEATING. That is one matter that this committee does not have to resolve.

Mr. STROBEL. That is correct.

Mr. MALETZ. Mr. Strobel, if I may turn to another matter.

Mr. KEATING. Before you do, I would like to renew my request to ask Mr. Hill some questions.

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The CHAIRMAN. I will have Mr. Hill and Mr. Elliott, they will both in just a minute.

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Mr. MALETZ. Turning to another matter, are you acquainted with the firm of Christiani & Nielson?

The CHAIRMAN. I am.

Mr. MALETZ. Are they a client of Strobel & Salzman?

The CHAIRMAN. They have been.

Mr. MALETZ. Have you done very much work with them?

The CHAIRMAN. Not very much; one contract.

Mr. MALETZ. Do you recall in the latter part of 1954 Christiani & Nielson was endeavoring to secure a contract from the State Department to draft the engineering plans and specifications for a new United States Embassy building at Asuncion, Paraguay; do you recall that? Mr. STROBEL. That is correct.

Mr. MALETZ. Do you recall in the middle of October 1954 you had a telephone conversation with a Mr. William Hughes, the State Department Director of Foreign Building Operations, and that you recommended Christiani & Nielson for Paraguay, for that job?

Mr. STROBEL. I would like to answer that this way, that Mr. Hughes called me on the phone and asked for information in regard to Christiani & Nielson and after the telephone conversation was over, why at the end of that he requested or it was agreed that I would send him a confirmation of the verbal recommendation I had given. I was also asked to give him whatever information I could about that firm.

Mr. KEATING. He asked you about that firm?
Mr. STROBEL. Yes.

Mr. KEATING. In other words he spoke of the firm first. It wasn't something you brought up?

Mr. STROBEL. That is correct.

Mr. MALETZ. Did you inform Mr. Hughes that Christiani & Nielson was a client at any time of Strobel & Salzman?

Mr. STROEBEL. I believe I might have but I don't know.

They had been clients of ours 2 years before I came down here.

Mr. MALETZ. Did you subsequently inform Christiani & Nielson officially that you had communicated with the State Department and recommended the firm?

Mr. STROBEL. I did. I think I did. After all, my name must have been given to Mr. Hughes by somebody and I think he did.

Mr. MALETZ. I show you a document dated October 19, 1954, and ask you whether this is a true and accurate copy of a letter you received from Paul Larson of Christiani & Nielson?

(Document examined by witness.)

Mr. STROBEL. That is correct.

Mr. MALETZ. Would you like to read the letter, Mr. Strobel?

Mr. STROBEL. It is addressed to Hon. Peter A. Strobel, Commissioner of Public Buildings, General Services Administration.

DEAR STROBEL: Thank you for your telephone call last Friday evening concerning our negotiations with the State Department relative to the proposed new United States Embassy building at Asunción, Paraguay.

I will of course gladly furnish you any information you want about my firm but I think it carries more weight if you receive the necessary data from our banking connections. As per our telephone conversation today, I have requested the Grace National Bank and the Bank of London & South America to furnish you the necessary data directly in a similar way to which such data would appear in a Dun & Bradstreet report.

I have been invited to a meeting in the State Department on Tuesday, October 22, and I hope to have an opportunity to see you while in Washington. I shall telephone you as soon as I know my schedule and, as agreed, I shall call on Mr. Swartz some time this week and report to you when I see you in Washington. With kind regards,

Yours sincerely,

PAUL LARSEN.

Mr. MALETZ. I offer that document in evidence, Mr. Chairman. The CHAIRMAN. It shall be received in evidence. (The document referred to is as follows:)

Mr. PETER A. STROBEL,

CHRISTIANI & NIELSEN CORP., New York 1, N. Y., October 19, 1954.

Commissioner of the Public Buildings Service,

General Services Administration, Washington 25, D. C.

DEAR STROBEL: Thank you for your telephone call last Friday evening concerning our negotiations with the State Department relative to the proposed new United States Embassy building at Asunción, Paraguay.

I will of course gladly furnish you any information you want about my firm but I think it carries more weight if you receive the necessary data from our banking connections. As per our telephone conversation today, I have requested the Grace National Bank and the Bank of London & South America to furnish you the necessary data directly in a similar way to which such data would appear in a Dun & Bradstreet report.

I have been invited to a meeting in the State Department on Tuesday, October 22, and I hope to have an opportunity to see you while in Washington. I shall telephone you as soon as I know my schedule and, as agreed, I shall call on Mr. Swartz some time this week and report to you when I see you in Washington.

With kind regards,

Yours sincerely,

PAUL LARSEN.

Mr. MALETZ. Subsequently did you write to Mr. Hughes of the State Department a personal letter providing information about Christiani & Nielsen ?

Mr. STROBEL. I believe I did.

Mr. MALETZ. I show you a document dated October 27, 1954, and ask you if this is a true and accurate copy of a letter which you wrote to Mr. Hughes in this respect?

(Document examined by witness.)

Mr. STROBEL. That is correct.

Mr. MALETZ. That letter provided Mr. Hughes with information concerning the backgrounds of Christiani & Nielsen?

Mr. STROBEL. That is correct.

Mr. MALETZ. Mr. Chairman, I offer that document.
The CHAIRMAN. Received in the record.

(The document referred to is as follows:)

DEAR MR. HUGHES: This is to confirm information given to you verbally a couple of weeks ago about the firm of Christiani & Nielsen, engineers and contractors, with which I understand you expect to negotiate in regard to construction of the American Embassy building at Asunción, Paraguay, South America.

I wish to furnish the following from a confidential report given to me by an international banking agency having dealt with this firm for many years: "Christiani & Nielsen are engineers and contractors with an international reputation. Their head office is in Copenhagen, Denmark, with branches and subsidiaries in a number of countries in Europe, Africa, Asia, and the following countries in Central and South America: Mexico, Panama, Venezuela, Brazil, Argentina, Paraguay, Uruguay, Peru, and Colombia. They were established in 1904.

"At present, they are actively engaged in a number of important engineering contracts in South America. Their standing and reputation in that area is very high and our own experience with the name, gained at this agency and also through our branches in South America, has been very satisfactory and we have no hesitation in recommending them as a first-class organization."

If I can be of further help and service to you, please do not hesitate to call upon me.

Sincerely yours,

P. A. STROBEL, Commissioner of Public Buildings.

Mr. MALETZ. Can you tell us whether Christiani & Nielsen eventually did obtain this contract from the State Department?

Mr. STROBEL. I do not know.

Mr. MALETZ. Do you know, Mr. Strobel, how many firms, clients of Strobel & Salzman, are presently being considered by the Public Buildings Service for architectural work?

Mr. STROBEL. No, I don't think I could say that. I don't think any are being considered except what we have been talking about.

We will, however, shortly select architects for the State Department building and also for a new building for the United States Û. N. delegation in New York City.

Mr. ROBB. Might I inquire whether you mean present clients or past clients or both?

Mr. MALETZ. Present or past.
Mr. ROBB. Present or past.
(Discussion off the record.)

Mr. MALETZ. I will ask you this question. Is it not correct that Strobel & Salzman get a lot of repeat business?

Mr. STROBEL. I would say that is correct.

Mr. FINE. Repeat business from clients of theirs.

Mr. MALETZ. From clients of theirs.

Mr. KEATING. In other words, if they do a good job the client comes back?

Mr. STROBEL. That is right. That is the way to stay in business. Mr. KEATING. The fact that somebody may have been a client of Strobel & Salzman in the past is not considered a disqualification for his consideration as an architect in the future, or otherwise it would bar a great many of the leading architects in the country.

The CHAIRMAN. The gentleman from New York has made his expression in that regard. I would say that there is a considerable degree of delicateness and untowardness in cases of that sort where Mr. Strobel, heading this Agency, has a wide choice. If he selects clients of his office that have been clients in the past, or selects those who may be clients in the future, there is, to say the least, a delicacy of situation there, and it may result in untoward conduct. And I think it is a matter for the consideration of the Nation, not only the membership of this committee, and we must address ourselves to it.

Mr. STROBEL. Mr. Chairman, I would like to say that at the present time I have not let any contract to any firm that has been, let us say, true clients of Strobel & Salzman. And I do not exclude Robert & Co. because they are not true clients of ours; they were subcontractors of Strobel & Salzman.

But I would also like to say, in response to Congressman Keating's remarks, that I have considered that very delicate proposition. Due to the fact that our clientele includes so many qualified firms it stands to reason that they should not be disqualified because they happen to have done business with Strobel & Salzman.

The CHAIRMAN. Why wouldn't you under those circumstances disqualify yourself?

Mr. STROBEL. That is what I am coming to.

Mr. KEATING. That is exactly the point. If the gentleman disqualifies himself it doesn't seem that these firms ought to be thrown

out.

Mr. STROBEL. Yes; but I disqualified the firms. I am perfectly willing to, and have the intention of, disqualifying myself at the time we get to the stage of any actual negotiation where an old or present client of Strobel & Salzman is up for consideration.

Mr. MALETZ. Mr. Strobel, is it not true insofar as your old clients are concerned that is, any clients for whom you have done any work prior to July 1, 1954-Strobel & Salzman will attempt to obtain business from them even though they have contracts with GSA, Public Buildings Service, or any other Government agency?

Mr. ROBB. Could we have that question read back, Mr. Chairman? I am not sure that we understand it.

Mr. MALETZ. Read the question.

(The question was read by the reporter.)

Mr. STROBEL. I think that question, the way it is worded, would imply that Strobel & Salzman would make an extra effort to get such business, which is not the case. The position I have taken is that I

would consider it unfair if Strobel & Salzman could not continue to do business with old clients.

Mr. MALETZ. Even though those old clients have undertaken to secure business from Public Buildings Service?

Mr. STROBEL. Right.

Mr. FINE. I assume that is tied up to the answer you gave to Congressman Keating and Chairman Celler, that you disqualify yourself if those old customers of yours come in.

Mr. STROBEL. That is correct.

Mr. FINE. But if they did obtain business from somebody else

Mr. STROBEL. It would not be for me.

Mr. FINE. That would not disqualify your firm from doing business with them?

Mr. STROBEL. That is right.

Mr. MALETZ. I have no further question, Mr. Chairman.

The CHAIRMAN. Mr. Hill, would you come forward, and Mr. Elliott, also?

TESTIMONY OF JOHN E. HILL, DIRECTOR OF COMPLIANCE DIVISION, GENERAL SERVICES ADMINISTRATION-Resumed

Mr. KEATING. I would like to ask you this, Mr. Hill. We were pursuing the question of how long you had been in the department, and you said since 1947, 1946.

Mr. HILL. Since 1946 I have been with GSA.

Mr. KEATING. Now, how many times did you confer with counsel, Mr. Maletz?

Mr. HILL. Well, I saw Mr. Maletz probably 8 or 10 times, but it wasn't in the nature of a conference necessarily.

Mr. KEATING. And were these documents that he is using here delivered by you here?

Mr. HILL. In a sense they passed through my hands. May I say that we were instructed by the Administrator's office to give the committee complete cooperation. When Mr. Maletz would request files we would send possibly to New York or to Mr. Strobel's office or some other place within the Agency and get them for Mr. Maletz.

Mr. KEATING. And that was the instructions of your superiors?
Mr. HILL. That is right, sir.

The CHAIRMAN. Did Mr. Strobel also say that you should cooperate with this committee?

Mr. HILL. As I understand it; yes, sir.

Mr. STROBEL. Mr. Chairman, it would be outside of my province to direct that particular Division to cooperate. I have no jurisdiction over that office.

The CHAIRMAN. Didn't you turn over your personal files?

Mr. STROBEL. I opened my files completely.

Mr. KEATING. Now, that is very refreshing, Mr. Hill. I conducted an investigation where we didn't have that kind of fine cooperation from the executive branch. That is very fine. But I want to pursue this just a little more. Did you have instructions from your immediate superior, the head of the Compliance Section, with reference to this investigation?